Texas governor targets SD biotechs

Texas Gov. Rick Perry quietly came to San Diego last week to lure biotech companies seeking to escape from higher income taxes under Proposition 30 to the Lone Star State.

It wasn’t his first trip, either.

Perry visited with executives from several large medical device companies, said Mark Cafferty, chief executive of the San Diego Regional Economic Development Corp. Perry talked to the companies about the benefits of relocating to Texas, a state with no corporate income tax, relaxed environmental regulations and reduced land costs, Cafferty said.

“(Perry) certainly was here. He certainly met with CEOs of companies within San Diego, seemingly with a heavy emphasis on the biotech industry,” Cafferty said. “Our region has a target on our back. And people are coming in very charismatic to lure jobs away. While we do the best we can locally at EDC, we need state leadership to fight back.”

A spokeswoman for Perry’s office would not confirm his visit in voicemails Wednesday, but said that Perry often visits other states to court employers.

“We are always looking to reach out to companies who might be interested in moving or expanding,” she said. “We’re always trying to tell the Texas story of low taxes and reasonable regulations.”

Perry also visited California in December to court employers, the Austin American-Statesman reported.

That visit came a month after voters in California approved Proposition 30, which raised the income tax rate for earners making more than $250,000 and added a quarter cent to the sales tax. In California, large corporations other than financial companies pay 8.84 percent in corporate taxes.

When Perry returned to Texas in December, he told a tea party rally in Tarrant County why he made the trip to San Diego.

“The passage of Proposition 30 in California this last November, which raised their tax rate substantially on businessmen and woman, has made California a target-rich environment for pro-business, low-tax, fair and predictable regulatory states,” he said.

One target for Perry appears to be ResMed, a San Diego manufacturer of sleeping devices.

“Gov. Perry was in San Diego in December and visited with a few members of our executive team for about 30 minutes. There wasn’t an offer on the table. It was more of a fact-finding mission to learn about ResMed’s concerns,” company spokeswoman Gretchen Griswold said Wednesday.

Peter Farrell, ResMed’s CEO, made some pointed comments on California’s business climate at the time.

“The whole place is very Democratic, very union-friendly and tax-unfriendly,” Farrell said. “And we just see the costs going up, and the benefits going down. We see more regulation and more taxes, and more of an anti-business kind of environment.”

He went on to say, “The unemployment rate in Texas is 7 percent; we’re over 10 percent. Surely they must realize that the policies here are incredibly negative ... They’re just anti-growth.”

Life Technologies spokeswoman Patty Zamora said the company already has operations in Texas, but could have even more in the future.

“Life Technologies currently has facilities in Austin and Houston,” she said. “We have invested in these facilities in the past and would consider doing so again as necessary to support our on-going business.”

In an interview that aired on Fox Business on Jan. 23, Aaron McLear, a former spokesman to California Gov. Arnold Schwarzenegger, said that Perry is known for courting companies in California.

“Gov. Perry in Texas is famous for going on hunting trips to California, where he goes and meets with CEOs, and gives them his cell phone (number),” McLear said. “(Perry) says here’s my personal number. Call me anytime, tell me what I can do to attract you to Texas.”

Cafferty said there’s still something about California that no state can sell.

“For all the challenges we have it’s still the place that the great ideas come from. It’s still the place that lots of smart people want to be. It’s still the place that has a lifestyle that attracts people from all over the place,” Cafferty said. “I tell folks all the time that you absolutely cannot undersell the quality of life and how much people love being a part of San Diego.”

But in a speech at the Texas Association of Business annual conference on Wednesday, Perry said Texas “hosts more immigrants from the state of California than any other state.”

Duane Roth, CEO of Connect, a San Diego-based non-profit that promotes technology entrepreneurship, said he didn’t know about Perry’s visit to San Diego last week, but that it wouldn’t surprise him.

Perry has friends in San Diego, Roth said, and “works the group” to find any willing to move to Texas.

“He makes numerous trips here, he spends vacation time here, which is telling, he has a home here,” Roth said. “He’s a governor that’s really focused on economic development. He’s going to spend time trying to recruit industry to locate or expand in his state. We (California) are of course the No. 1 target, because we’re so innovative and come up with these new ideas. Also, our business-friendly score versus Texas would not be high. On the other hand, I don’t think it’s been very successful.”

“When you talk to people who’ve been in both places, (they say) the culture here and in Silicon Valley is far different from Texas. The ability to do the things we do here, because of the talent pool and because of the infrastructure, is still the best in the world.”

Some cities in Texas have the potential for growing their own biotech industry, Roth said.

“Austin could, Dallas could, Houston has tremendous medical capacity,” he said. “The challenge has been, they don’t have the infrastructure to commercialize, people who are willing to mentor and share, venture capital, and the things that come out of what has happened here over the last 25-30 years.”